Slower new home starts
New residential construction was down 17 percent in the Capital Region from 2004 to 2005 but builders still built 15,559 single family detached homes and 2,901 apartments and condominiums. Most of the construction occurred in Sacramento County where 7,811 single-family permits were issued but Sac County is declining in popularity. Across the state builders built 154,816 single-family detached homes and 52,338 apartments and condos.
Although statewide housing construction declined 2.7 percent in 2005 from 2004 it was the second consecutive year of 200,000 housing units according to the Building Industry Association.
Think 200,000 new housing units are too much? Nope, not according to housing economists who insist that we need 250,000 new housing units built each year to keep pace with the yearly 500,000 new state residents.
This year I don’t think we will have another 200,000 units built in the state. Builders will be less ambitious as investors and speculators back out of the market and new home prices have out-distanced first time buyers.
Land and the cost to development it in the Capital Region are affecting builder’s attitude and profits. The Board of Sups in Sacramento County recently passed a law that required builders to build 15 percent of all their new homes for free and donate them to low income home-owners. Builders responded accordingly and 2005 was the largest year over year decline for new construction in Sacramento County among the state’s top ten counties.
Sacramento County’s political leaders profess their desire for “smart growth” “In-fill development” and commuter friendly communities, however, by mandating that local builders donate 15 percent of all their new construction profits to house the homeless, builders are moving out of the area to Sutter, Yuba and Yolo Counties. This creates more commuters driving into the county not less and negates the Board of Sups public policy on “smart growth.” Economics, not political correctness, continues to determine the direction of growth.
Although statewide housing construction declined 2.7 percent in 2005 from 2004 it was the second consecutive year of 200,000 housing units according to the Building Industry Association.
Think 200,000 new housing units are too much? Nope, not according to housing economists who insist that we need 250,000 new housing units built each year to keep pace with the yearly 500,000 new state residents.
This year I don’t think we will have another 200,000 units built in the state. Builders will be less ambitious as investors and speculators back out of the market and new home prices have out-distanced first time buyers.
Land and the cost to development it in the Capital Region are affecting builder’s attitude and profits. The Board of Sups in Sacramento County recently passed a law that required builders to build 15 percent of all their new homes for free and donate them to low income home-owners. Builders responded accordingly and 2005 was the largest year over year decline for new construction in Sacramento County among the state’s top ten counties.
Sacramento County’s political leaders profess their desire for “smart growth” “In-fill development” and commuter friendly communities, however, by mandating that local builders donate 15 percent of all their new construction profits to house the homeless, builders are moving out of the area to Sutter, Yuba and Yolo Counties. This creates more commuters driving into the county not less and negates the Board of Sups public policy on “smart growth.” Economics, not political correctness, continues to determine the direction of growth.
posted by Ken Calhoon at 8:43 AM
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